Playboy lost $4.9 million on Ethereum, it was accepted as NFT payments
PLBY Group ( PLBY ), the parent company of Hugh Hefner’s Playboy, said it took a $4.9 million write-down loss on Ethereum it held last year, as the crypto winter saw a significant drop in broader market prices.
The lifestyle and media company said it accepted Ethereum as payments for its “Rabbitars” non-fungible tokens (NFTs) launched in 2021, which it holds on its balance sheet as digital assets, according to an annual filing on Thursday. The value of the digital assets is $327,000 last year, the archive says.
An earlier filing shows the company’s digital assets were worth $1.75 million as of September 30 last year.
The company explained that the company accounts for its digital assets as “intangible assets with indefinite lives”, which are subject to impairment if the fair value of the assets falls below book value, at any time. The impairment losses that the company takes on the digital assets cannot be recovered, even if the fair value of the assets rises after taking the impairments.
“The market price of an Ethereum in our main market ranged from $964 – $3,813 during the year ended December 31, 2022, but the book value of each Ethereum we held at the end of the reporting period reflects the lowest price of an Ethereum noted on the active the exchange at any time since it was received,” according to the filing. “Therefore, negative fluctuations in the market price of Ethereum can have a material impact on the Company’s earnings and book value, while the only time an increase in prices will positively affect the Company’s earnings is when Ethereum held on the balance sheet is sold at a profit,” the filing said .
The company launched its “Rabbitar” NFT project in October 2021, during the peak of the crypto market. Ether, the native token of Ethereum, has lost around 60% in value since October 2021, according to TradingView data.
Earlier in 2021, Playboy entered the NFT and blockchain technology industry with its NFT drop called “Liquid Summer”, which is a collection of digital artwork created in collaboration with artist Slimesunday. The collection, which was minted in May 2021, contains archival photographs of Playboy model Lenna Sjööblom – the so-called “First Lady of the Internet”.
However, these NFT drops weren’t the company’s first foray into the world of digital assets. In 2018, Playboy TV began accepting bitcoin payments. In June, bitcoin payments extended to Playboy.com.